Functionality is Key to Resident Retention and Long Term Profitability
There are 10 fundamental quality-of-life issues that make or break an apartment community , yet very few people in the multifamily property management industry consciously consider them when developing or renovating a apartment community . These are essentials—not luxuries—because they affect the satisfaction of your residents every day, from the very first day they visit your property. These 10 overall quality-of-life issues are the basis of an all-encompassing functionality audit of your property that can help you maximize resident retention and the profitability of your asset.
The quality-of-life issues determine how the entire apartment community rates with residents and prospective residents, consciously or subconsciously. The next test is the functionality of the apartment itself. How well does the design of the apartment satisfy the residents every day? This is the essence of functionality.
The apartment community: 10 Overall Quality-of-Life Issues
These 10 issues determine how the overall apartment community rates with prospective residents and residents. Note: Price is not one of the issues. The issues are listed in order of importance. All are vital to success:
2. Natural light (larger windows with white trim; no bronze or brown frames)
3. Full-size washer/dryer connections
4. Effects of sound and noise
5. Sufficient hot water
6. Sufficient parking
8. Private entry
9. Package and mail retrieval
10. Extra-large patio or balcony
When you have resolved all or most of these 10 quality-of-life issues, you can succeed even if your property lacks other desirable amenities or in a difficult market. However, in the absence of the 10 quality-of-life issues, staying competitive is much more difficult. Without adequate resident retention, you will be fighting an uphill battle for stability and profitability.
Functionality is a measure of how well a floor plan works to deliver to the resident the day-to-day environment and quality of life that the resident deems essential to overall satisfaction. A functionality audit is a way to rate quantitatively and in detail how well a floor plan works for the person who lives there. A minimum audit includes a complete survey of the functionality of your property and of your primary competitor.
If your apartment community is in its predevelopment stage, you can make adjustments now to ensure that the 10 quality-of-life issues and related issues of functionality are resolved in the plans for your property. The functionality audit gives you a way to prioritize decisions that will have a long-standing effect on the asset’s financial performance.
If your apartment community already exists and you haven’t resolved all or most of the 10 quality-of-life issues, or if your floor plans have functional deficiencies, your challenge is greater. You can compensate for functional drawbacks and emphasize functional advantages when you know exactly what the advantages and disadvantages are and how your market rates them. A functionality audit can give you that information.
For maximum long-term impact, involve your strategic planner from the very beginning, then train your leasing team members how to sell the strongest points in their written and verbal sales messages. The result: You will lease more apartments and retain more residents.
How to work smarter, not harder: the architect’s directive
It is not unusual for an architect to pull existing apartment designs off a shelf. However, this standardized, homogenized approach can present long-term risks for the property’s performance. Because very few architects go into the markets and shop the primary competition personally, it is essential to communicate to your architect what he or she needs to know about your unique property and its market. To minimize the risk of inappropriate or functionally obsolete product design, your strategic planner can create an “architect’s directive,” a concise guide to what is required in the plans for your property. This gives the architect a clear set of expectations. The ultimate goal is to have your strategic planner and your architect work together as a marketing and design team to deliver a product that will function optimally to give your residents what they most want.
What can a developer do to protect a new development from functional obsolescence?
There are still new apartment communities being built that are functionally obsolete. This can be avoided by taking action long before the foundations are poured. To maximize cost-effectiveness, changes and plans have to be made before final working drawings are sent to bid and before board approvals and other requirements of municipalities become an issue.
It is in the best interest of the owner-developer and the asset to make certain that functionality is considered as part of the earliest planning, and that the architect receives vital direction concerning functionality. The result will be a more successful, more profitable asset where residents get what they want and need, and where residents want to stay.
Nevitt Functionality Index™
Developed over a period of more than 10 years, the Nevitt Functionality Index includes the 10 quality-of-life issues as well as specific features in every living area that seriously affect the marketability and long-term profitability of your property. For example, the existence of a second bathroom, extent of unbroken walls, linear footage in a closet, and the length of the vanity countertop.
Every element of the environment you offer residents affects their satisfaction with the property. The impact of the existence or lack of these elements can be evaluated and rated during a functionality audit.
ARTICLE FROM: Forty2